The Ethics of House Flipping

I have not heard significant criticisms of the practice of house flipping though, to be sure, such criticisms are there to be made. In the first place, house flippers drive up the cost of housing by a significant multiple, especially in areas where the housing boom is in full force. Now, in Los Angeles and the surrounding suburbs, for example, the price of a home is usually no less than 500,000 dollars or so. Ordinary people who subsist on middle class wages cannot afford such homes--or if they are enticed to buy them, they do so using the instrument of the variable rate mortgage. When inflation goes up (which will happen) and when the interest rates go up, middle class and working class people will be stuck with mortgages that they cannot afford and they will be forced to sell the property that they purchased at a possibly deflated value. Unless housing prices continue to grow--and there has to be some limit to the growth here--the middle and working class buyers will be holding "negative equity" and it will be the financial ruin of many, many scores of people. I am of the opinion that the overwhelming debt of our society on all levels--from individuals to the government itself--will bring about a deflation of value in houses and in many other sectors in the escalated, manic markets post stock market crash of 2001. In the second place, one must wonder what moral right house flippers have to making such outrageous profits off of an essential need, viz. 'housing', for which there is very little value invested. I would like to say that if a buying and selling practice itself jeopardizes the fundamental need of individuals to have affordable housing who otherwise are hardworking and contributing members of society, then there can be no moral right to engage in such a practice. And, the activity of "fixing up" a property for the sake of a flip is not, generally speaking, adding an equivalent measure of value to the property. Indeed, it is only for the sake of riding the wave of "comparability" in a housing market that all "fixing up" is done.

My conclusion is that house flipping is an unethical practice of buying and selling akin to usury. Laws which constrain usury can serve as good examples to restrict the practice of house flipping. Some basic guidelines might include limiting buying houses to those people who plan to dwell in them or perhaps limiting the percentage profit that one can make off of buying and selling a house within a one year period, say up to but no higher than 5%.

And lastly, I beg you to consider the kind of people who flip houses. Consider the materialistic, gluttonous selfish whores that they are. Think of them in all of their particularity. And then think of their contribution to your inability to acquire affordable housing.